If you are seeking a strong investment opportunity in Canada, you may want to consider buying a healthcare franchise.
The need for good health is a constant, and healthcare franchises are generally considered recession-resistant. Still, Canada presents a uniquely rich opportunity for healthcare brands for two reasons:
- The nation’s single-payer healthcare system is publicly funded but delivered privately.
- Canada’s population is older and living longer than most of the world.
Although there is some debate about the healthcare system in Canada, Canadians pay less per capita for healthcare than Americans and many other modern countries and report better outcomes. In 2018, healthcare spending in Canada totaled C$253.5 billion, or C$6,839 per person. That represents 11.3% of the nation’s gross domestic product (GDP), one of the highest percentages among the world’s developed countries. (The U.S. spends the highest percentage, at 17.9% GDP, or C$14,677 per person, but with less positive results.) Canada’s healthcare system, called “Medicare,” also gets mostly good reviews from its citizens.
By the end of this year, Forbes predicts that as much as 15 percent of global healthcare spending will be based on value- or outcome-based care. Value-based care stresses wellness, preventive screenings and quality of care that lead to better outcomes. That is expected to have a strong impact in countries like Canada and the U.S. because of the high percentage of GDP devoted to healthcare spending.
Public funding, private delivery
The healthcare industry is flourishing in Canada, with both the public and private sectors investing substantially as they look to capitalize on the opportunities there.
Leading the way are franchises such as Pearle Vision, which currently operates about 60 EyeCare Centers throughout Canada. Thanks to the growing healthcare sector, Pearle Vision is in the process of expanding its footprint in Canada. In 2018, about 2 percent of Canadian healthcare spending was spent on vision services, according to the Canadian Institute of Health Information.
The Canadian Medical Association estimates that 75 percent of Canadian healthcare services are funded publicly but delivered privately, or by private providers. Almost all healthcare deemed “medically necessary” is funded through the national system, which is administered at the provincial level. There is some variation among provinces in what is covered.
Pharmaceuticals and some services — including optometry, dentistry, mental health, home care and long-term care — are usually not covered by Medicare and are paid out of pocket or through supplemental insurance. About 75 percent of Canadians have supplemental insurance, which is mostly provided through employers.
Doctors and other healthcare businesses deal directly with the provincial insurers; patients do not have to get involved in billing or claims. Domestic and international healthcare companies doing business in Canada may have to adjust their business practices to conform to the Canadian government’s way of processing claims.
Longer life expectancies
Canada’s life expectancy is among the highest in the world — at 79 years for men and 85 years for women. That is an important factor for healthcare companies who are considering expansion into Canada. The demand for senior healthcare services, as well as home care and long-term care, is on the rise and is expected to continue to increase as the population gets older and lives longer. That offers franchisees in the healthcare industry the opportunity to provide necessary services and products and to help the changing demographic in their communities.
For example, Pearle Vision anticipates that an aging population and aging workforce will lead to more critical need for vision care. As people age, they are more likely to require glasses or contact lenses, whether it will enable them to continue working longer or so they can enjoy a fuller life in retirement. We also know that a strong market for quality vision care already exists: According to the Canadian Institute of Health Information, 60 percent of Canadians report vision problems that require, at minimum, corrective lenses, and Canadians spent more than $5 billion in 2017 on vision care.
A healthcare franchise like Pearle Vision offers established systems, processes and supply chains that make it easier for franchisees to be up and running more quickly and more efficiently. Additionally, a brand with an established presence in Canada would give a franchisee access to a network of peers from which to gain advice and information.
Canada’s burgeoning healthcare industry offers a wealth of opportunity to healthcare franchises and their franchisees. With the backing of a franchise system, entrepreneurs should have the tools they need to both successfully navigate Canada’s Medicare system and serve their changing communities.
Josh Robinson is vice president of licensing & development of Pearle Vision and is responsible for defining and developing business strategies to grow the Pearle Vision franchise system. Robinson previously oversaw the franchise store operations team in the Eastern United States, Eastern Canada and Puerto Rico as a territory vice president. He has more than 20 years of experience supporting franchisees and helping them optimize the performance of their